The U.S. non-farming payroll employment figure dropped by 4,000 in August, the first decline since the same month of 2003, the Labor Department reported Friday.
The August reading was much weaker than the 110,000 increase of new jobs expected by economists.
The report showed that the jobs cut in August were from both the private and government sectors. The government cut 28,000 jobs, while all private employers added 24,000.
Meanwhile, jobs gains in June and July turned out to be smaller. The economy added 69,000 new jobs in June, compared with 126,000 reported a month ago. For July, 68,000 jobs were created, less than the 92,000 previously estimated.
In August, employment in manufacturing, construction, and local government education declined, while job growth continued in health care and food services, according to the report.
Even with the jobs cut, the unemployment rate remained at 4.6 percent, the same as in July, mainly because hundreds of thousands of people left the work force for any number of reasons.
The 4.6-percent jobless rate was the highest since January, when the rate also stood at 4.6 percent. However, the current unemployment rate is still low by historical standards.
Workers' average hourly earnings rose by 0.3 percent to 17.50 dollars in August. That was in line with analysts' expectations. Over the last 12 months, average hourly earnings increased by 3.9 percent.
Wages account for two-thirds of a company's production costs. While wage growth should help keep consumers spending, a contributor to overall economic health, while mounting wage pressures could trigger a rise in inflation.
The job cut in August was seen as a sign that tightening credit stemming from the troubles in the high-risk subprime mortgage market, which offers loans to people with lower credit and income, is putting a strain on overall economic activity.
Source: Xinhua
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